For more information contact:
Amir Rosenthal
(203) 598-0397
Vice President, Chief Financial Officer,
General Counsel & Secretary

KATY INDUSTRIES, INC. ANNOUNCES RESULTS FOR FIRST QUARTER

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ENGLEWOOD, CO - May 8, 2001 -- Katy Industries, Inc. (NYSE: KT) today reported
a net loss for the first quarter of 2001 of ($8,372,000) or ($1.00) per diluted
share, compared to net income of $645,000, or $.08 per diluted share, in the
first quarter of 2000. First quarter results of 2001 include unusual charges
totaling ($6,188,000) after-tax, or ($.74) per share. Unusual items are
detailed on a schedule accompanying this release.

Katy also announced that it completed the sale of its Thorsen Tools business on
May 3, 2001. Accordingly, Thorsen's results are reported as operations to be
disposed of in the accompanying summary of operations. Impairments of
$1,050,000 to the carrying values of certain Thorsen assets are reported in the
line "Equity in loss of operations to be disposed of" for the first quarter of
2001, in anticipation of the expected loss on the sale of this business to be
recorded in the second quarter of 2001.

On March 30, 2001, Katy announced that it had entered into a definitive
agreement with KKTY Holding Company, L.L.C. for a recapitalization of Katy.
Under that agreement, KKTY Holding commenced a tender offer for up to 2,500,000
shares of Katy common stock at $8.00 per share, and agreed to purchase 400,000
shares of newly issued convertible preferred stock for $100 per share, or
$40,000,000.

Katy announced today that KKTY Holding Company, L.L.C. has advised Katy that it
is re-evaluating its tender offer and proposed purchase of preferred stock in
light of Katy's operating results for the first quarter and Katy's interim
operating results for April 2001 (which indicated a continued shortfall from
previously projected earnings before interest, taxes, depreciation and
amortization). KKTY Holding advised Katy that based on these developments, it
believes one or more of the conditions to the tender offer may not be satisfied
at the expiration date of the offer. Consequently, KKTY Holding is considering
alternative courses of action to be negotiated with Katy, including among other
things, an increase of its proposed preferred stock investment in Katy, a
decrease in the preferred stock conversion price and a decrease in the number
of shares and price per share to be purchased pursuant to the tender offer.

Katy Industries, Inc. is a diversified corporation with interests primarily in
Electrical/Electronics and Maintenance Products.

Where You Can Find Additional Information:

Shareholder approval of the preferred stock purchase is the subject of a proxy
statement that was mailed to Katy shareholders in April for a shareholder
meeting to be hold in June 2001. Katy strongly advises all shareholders to
read Katy's proxy statement, which has been filed with Securities and Exchange
Commission. Katy's proxy statement contains important information that you
should consider before making any decision about the proposals to be voted on
at Katy's shareholder meeting. Katy's proxy statement has been mailed to all
Katy shareholders and is available, together with the annual report, quarterly
reports, current reports and other documents filed by Katy, at no charge at the
SEC's web site at http://www.sec.gov or from Katy by contacting Steve Nicholson
at (303) 290-9300.

Neither this nor any previous announcement is an offer to purchase or a
solicitation of an offer to sell shares of Katy. The acquiring entity has
filed a tender offer statement and Katy has filed a solicitation/recommendation
statement with the SEC with respect to the tender offer. The tender offer
statement (including the offer to purchase, the related letter of transmittal
and the other offer documents attached as exhibits thereto) and the
solicitation/recommendation statement contain important information which
should be read carefully before any decision is made with respect to the tender
offer. The offer to purchase, the related letter of transmittal and certain
other offer documents, as well as the solicitation/recommendation statement,
are available to all Katy shareholders at no expense to them. The tender offer
statement (including the offer to purchase, the related letter of transmittal
and all other offer documents filed with the SEC) and the
solicitation/recommendation statement are also available at no charge at the
SEC's web site at http://www.sec.gov.

Some of the foregoing communications constitute "forward-looking statements."
Such forward-looking statements are subject to various risks and uncertainties
and Katy claims the protection afforded by the safe harbor for forward-looking
statements in the Private Securities Litigation Reform Act of 1995. These
statements include all statements regarding the timing, completion and effect
of the proposed recapitalization of Katy. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors, including the
ability to obtain the needed shareholder approvals on a timely basis, that,
together with the other risks and uncertainties detailed from time to time in
Katy's filings with the SEC, may cause the actual results, performance or
achievements of Katy to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking
statements. The safe harbor is not applicable to the foregoing communications
to the extent that they constitute tender offer materials and has not been
judicially determined to be applicable to such communications to the extent
that they constitute soliciting materials in connection with the tender offer.

Click below for PDF financials:
First Quarter 2001 Financials

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